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Fortuna's profit shrinks

Vancouver-based Fortuna Silver Mines has posted a 64% year-on-year decline in December quarter headline profit from US$12.3 million to $4.4 million.

Staff Reporter

Lower metal sales from both the San Jose mine in Mexico, and Caylloma, in Peru, impacted the result.

Fortuna said higher production costs were partially offset by lower share-based payment charges and a realised gain in commodity derivative instruments of $900,000, compared to a loss of $1.5 million in 2017.

Net income for the quarter came to $2.2 million or a 1c per share, compared to $34.1 million or 21c, in the comparable period of 2017.

Special items included the reversal of an impairment charge and foreign-exchange losses on Lindero project construction, in Argentina. Total Lindero capex has been forecast to increase up to $295 million or 20% over the initial capital guidance and take longer to complete than initially thought.

Fortuna produced 1.94Moz silver and 12,070oz gold during the quarter.

For 2018, Fortuna said adjusted income fell to $38.4 million from $48.7 million in 2017 and net income fell by more than half to $34 million, compared to $66.3 million in 2017.

Fortuna expects San Jose to produce 7.3-8.1Moz silver and 49,000-54,000oz gold this year, with Caylloma contributing 0.9-1Moz silver. Silver equivalent production is expected to range between 11.7-12.9Moz at AISC of $9.9-$12.1/oz.

Shares in Fortuna (TSX:FVI), which has a current market capitalisation of C$767.71 million, have lost 23% of their value in the past 12 months. The stock opened nearly 3% or 14c lower Thursday in Toronto at $4.80.